Twitter invests $70 million in SoundCloud

Twitter‘s CEO recently mentioned in an interview earlier this year that the company invested $70 million in SoundCloud, an online music platform to support its efforts with creators. Twitter already had a relationship with SoundCloud, which it considers to be a “great partner over the years”.

Moreover, two years ago, it was in discussions to acquire SoundCloud, but eventually backed out because of the streaming service’s lack of licenses. SoundCloud, which was a free platform to upload and share music, is now venturing into a subscription based service after acquiring several music licenses.

The company, however, is cash strapped and Twitter’s investment provides it with the much needed funds for this initiative. While an immediate benefit for Twitter is not visible, according to the company, SoundCloud’s technology can prove beneficial for its efforts with creators.

If Twitter eventually plans to integrate SoundCloud with its platform and uses online music streaming as a way to increase user growth and engagement, this investment can drive long term revenue growth for the company.